UPDATE: OfficeMax Posts 4Q Loss; Sales Woes Persist
18 Fevereiro 2009 - 3:38PM
Dow Jones News
OfficeMax Inc. (OMX) swung to a fourth-quarter loss amid $429.1
million in write-downs as the No. 3 office-supply retailer
forecasted a continued drop in sales.
The company "is cautious in its expectation for 2009," as
Chairman and Chief Executive Sam Duncan said sales-to-date this
year have declined slightly greater than the 14% seen in the fourth
quarter.
OfficeMax is cutting new-store openings and suspending
remodelings, executives said during a conference call to discuss
the results.
"We continue to make the tough decisions necessary to conserve
our cash in order to weather these conditions," Duncan said during
the call.
Cash-preservation efforts will include doing away with matching
contributions for the company's defined benefit retirement plan and
dropping merit pay increases.
Lower sales and weak consumer spending have forced other steps
by OfficeMax to boost liquidity, including suspending its quarterly
dividend, eliminating jobs and delaying its store-remodeling
program until economic conditions improve.
OfficeMax reported a net loss of $396 million, or $5.21 a share,
compared with year-earlier net income of $70.5 million, or 92 cents
a share. Excluding items such as the write-down and a prior-year
divestiture gain, earnings fell to 2 cents from 65 cents.
Revenue dropped 14% to $1.88 billion.
Analysts polled by Thomson Reuters were looking for earnings of
15 cents a share on revenue of $1.94 billion.
Gross margin slipped to 24.2% from 25.6%.
The office-products retailer could post another loss for its
current fiscal year, given the ongoing softness it is seeing,
analysts said.
Near-term liquidity does appear ample to weather the storm, "so
long as we see some economic recovery towards the end of 2009,"
said J.P. Morgan retail analyst Christopher Horvers in a research
note.
The company's contract segment - its business-to-business
office-products distributor - swung to a loss as revenue dropped
18% amid a 15% decline in the U.S., thanks to weak corporate
account sales. OfficeMax's retail division also saw red ink,
reporting a 10% decline in revenue as same-store sales fell
14%.
Last month, OfficeMax tapped former Circuit City Stores Inc.
(CCTYQ) Chief Financial Officer Bruce H. Besanko for that same
role.
Shares of OfficeMax, which closed at $4.17 on Tuesday, their
lowest level since late October, were recently up 8 cents, or 1.9%,
to $4.25.
-By Karen Talley, Dow Jones Newswires; 201-938-5106;
karen.talley@dowjones.com